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Wednesday's Top 10 with NZ Mint: Own goal; a Tassie solution; too complex to manage?; Chinese savers; carbon capture; German pay rises; LVR limits; Dilbert

Posted in Opinion

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard will be back with his version tomorrow.

We welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

See all previous Top 10s here.

1.A. Tax cheat #1
The head of the IMF has recently pointed out that the Greeks wouldn't be in the strife they are in if they would only just pay their taxes. Well, it turns out that Christine Lagarde herself pays zero tax on her NZ$725,000 salary+benefits package. It's a massive own-goal. Her's is part of a general rort by UN and other official international organisations. More from the UK Guardian:

Base salaries range from US$46,000 to US$80,521. Senior salaries range between US$95,394 and US$123,033 but these are topped up with adjustments for the cost of living in different countries. A UN worker based in Geneva, for example, will see their base salary increased by 106%, in Bonn by 50.6%, Paris 62% and Peshawar 38.6%. Even in Juba, the capital of South Sudan, one of the poorest areas of the world, a UN employee's salary will be increased by 53.2%.

Other benefits include rent subsidies, dependency allowances for spouses and children, education grants for school-age children and travel and shipping expenses, as well as subsidised medical insurance.

For many years critics have complained that IMF, World Bank, and United Nations employees are able to live large at international taxpayers' expense.

Officials from the various organisations have long maintained that the high salaries are a way of attracting talent from the private sector. In fact, most senior employees are recruited from government posts. [Helen Clark, Chris Carter, ... ]

1.B. Unconvinced
Greece is stuck with a currency that is killing it. If it could devalue, the options with dealing with its crisis open up considerably. Same for Portugal, Spain, etc. Is it the same for Tasmania, do you think? They have similar stresses - no growth, high and growing unemployment, and an austerity/anti-austerity debate. What if ...

Prime Minister, Lara Giddings is on line two. She’s babbling something about wanting to leave the Aussiezone.”

“Hi Lara, it’s Julia. What’s up?”

“Listen, Julia, we’ve been thinking… the only way we can kick start the Tasmanian economy and have at least one Labor Party with a pulse in this country, is to devalue our currency. We need to leave the Aussiezone. It’ll work, I’m sure of it!”

“Jesus Lara, you’re such an idiot.”

“Seriously Julia, unemployment here is 8.3 per cent and rising. I’m borrowing $6 million a week and I’ve got no hope of getting the budget back above zero. The banks are shouting at me. I’ve had to sack 250 nurses for Christ’s sake! They’ll vote in the anti-austerity Greens!”

2. Is the US Fed "too complex to manage"
The size of big banks has raised some serious questions about their abilities to cope and the systemic risks should they fail. But what about the regulators? ... especially a regulator as large as the US Federal Reserve. Over the years it has been given a very wide range of responsibilities. Daniel Indiviglio has been looking at the issue:

Part of the Fed’s problem is that it wears many hats. Among many functions, it serves as a bank advocate and lender of last resort while supervising banks. It also oversees systemic risk, worrying about looming global macroeconomic disasters. And of course, it sets US monetary policy, hoping to control inflation. Its mission also requires it to aim for maximum employment.

As far as monetary policy goes, Fed Chairman Ben Bernanke is caught between some Democrats who think it should flood financial markets with even more cash as a form of economic stimulus and Republicans who fear inflation or just think too many dollars have been printed.

In short, in the current environment Bernanke seems to be aggravating almost everyone. Advocates for breaking up big banks like the idea of smaller, simpler institutions. It’s tempting to contemplate whether, in a parallel world, the same logic would apply to the Fed.

3. Centers of the universe
The Bo Xilai scandal exposed that Chinese 'pricelings' are being trained at elite US universities. Why is Harvard training the next generation of Chinese Communist Party leaders? Hang on a mo', Harvard trained some of the current generation too. What's going on? William J Dobson looked into it:

A little more than 10 years ago, the Chinese Communist Party embarked on an ambitious effort to give its public officials the training, skills, and expertise they need to govern in the increasingly complex situations that test an authoritarian regime’s resilience. Carefully vetted officials—a selection of some of the regime’s rising stars—were sent abroad to study in specially designed programs at some of the world’s finest universities. The first crop was sent to Harvard. Today, Chinese authorities have expanded the program to include Stanford, Oxford, Cambridge, the University of Tokyo, and others. A year ago I met with Lu Mai, the head of the China Development Research Foundation, who oversees the program. “This was a big decision,” he told me. “We have already sent more than 4,000 [officials]. I don’t know any other country that sends on that scale.”

4. Germany to the euro: drop dead
Germany is a success, the countries of southern Europe are economic failures. So why have those southern countries awarded their workers fat pay hikes? It is even more curious to find that German workers haven't seen big pay hikes, despite their country's success. Part of the euro-area rebalancing is going to require strict pay moderation in the south, and higher pay rises in Germany. But higher pay will bring inflation - and that may be a bridge too far for the Germans. Rebalancing looks unlikely because the Germans want to keep their advantage. You see any way out of this?

5. Why they're different
Here's one to water your eyes - Chinese households save about 25% of their income. How to you compare? - I know I am not in that league. Just thinking about what that might mean makes me uncomfortable. So, to help me out, the World Bank told the Chinese they should spend more and save less (see pg 49 of the link). The FT has a run down on why that is:

"We don’t buy much in the way of clothing and other things because we want to put money aside,” Mr Li says.

A big motivation for such saving is lack of a social security system to cushion Chinese in old age or ill health. Serious illness or accident often spells household bankruptcy. For most rural people, children have to play the role of pension provider.

Some economists would like to see mass privatisation to shift wealth out of the dominant and domineering state sector. Many Chinese would certainly like the chance to share a little more in the nation’s ever-more conspicuously displayed wealth.

6. A fad fallacy
Some [superficial?] people think an economy can run with two currencies circulating together. It's a naive idea which evaporates given any serious thought - usually by people who have never heard of Greshams Law - but still, its out there on the fringes. Here is a useful reason why, using Spain as an example which currently has all its debt denominated in euros.

The problem in terms of the euro is that this doesn't really resolve the bank run problem. Dipping Spain's toes into the waters of reintroducing a national currency only further undermines confidence in the proposition that a €1,000 bank account in Spain is equal in value to a €1,000 bank account in Germany. A local economy of cash and pesetas should keep functioning, but Spanish banks will keep getting "jogged" out of existence.

7. Carbon-capture spawns scepticism and hope
The world's largest facility for filtering carbon dioxide out of industrial emissions was inaugurated in Norway this week. While some see it as a godsend in efforts to reach environmental targets, others find the technology too dangerous and expensive. The usual suspects will line up for and against - even among the commenters on this website - but it seems we will know if this works and is sustainable soon enough. Its a big test, a really massive one. Speigel reports:

On Monday, Norwegian Prime Minister Jens Stoltenberg and European Commissioner for Energy Günther Oettinger attended the official inauguration of the new CCS plant. Stoltenberg has characterized the plant as a milestone on the road to a climate-friendly future, calling the project "Norway's moon landing."

Of course, this is a slight exaggeration. Saving the global climate from the warming effect of the greenhouse gas carbon dioxide is a massive task. It gushes from steel mills, cement factories and chemical plants. But the most damaging thing to the climate is mankind's thirst for cheap energy. "Climate-friendly wind and solar energy won't be enough," says Amundsen. Statistics compiled by the International Energy Agency (IEA) back his assertion: In China alone, the amount of electricity produced by burning coal has increased six-fold over the last 20 years.

8. de ja vu all over again
One hundred years ago, John Pierpont Morgan was called before a Congress suspicious of his bank’s power and influence. Sound familiar? Beverley Gage looks back at the roots of JPMorgan Chase.

Morgan died in 1913, a few months after his Pujo appearance, convinced that the nation had turned against him despite his many good deeds. Today, a similar refrain appears once again to be making its way through Morgan banking circles. Since 2008, JPMorgan Chase has been widely regarded as one of the “good banks,” cautious and farseeing in ways that would have made its founder proud. Partly for that reason, CEO Jamie Dimon emerged as one of Wall Street’s point men on the fight against regulation, the sort of banker who could be trusted to do things right without government intervention.

Now Dimon is being held up as proof that even the best bankers need oversight and transparency—the very sentiment that Morgan lamented in the months before his death. “The time is coming when all business will have to be done with glass pockets,” he complained a century ago, foreseeing an end to the secretive banking world in which he had made his career. Perhaps he would have taken heart in the knowledge that such a time has not yet come to pass.

9. LVR limits protect homeowners
Are government imposed limits on borrowing a good thing? It appears they have worked wonder in Texas, says Floyd Morris at the NY Times.

How did Texas end up with such a law? Mr. Fleming said that when Texas was being settled, its founder, Stephen F. Austin, got the Legislature of Coahuila, the Mexican state that included Texas, to protect land purchasers from having their homes seized to pay off other debts they had incurred. He feared that settlers from the East would otherwise be chased by creditors. Similar provisions have been in every Texas State Constitution.

Until 1997, home equity loans were not legal at all in Texas, to the dismay of banks. In that year, voters approved a provision passed by the Legislature that allowed such loans, but set forth the limits still in force.

Banks are preparing to push to amend the law, Mr. Fleming said in an interview. They say that some homeowners with home equity loans have been unable to refinance high-interest-rate loans because a current appraisal shows their equity is now less than 20 percent.

But there appears to be widespread support for retaining the limit, at least on new home equity loans. There are many people in Texas who might have lost their homes had there been no such limit, and many in other states who might have kept theirs had a similar law been in effect across the country.

10. The last laugh
Not really humour, but this video is for Bernard who uses two wheels - it would be much more 'environmentally friendly' if he cut his cycle-footprint in half. If can't be embedded, so you will need to link to the BBC here »

And then there's this ...

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104 Comments

David Yikes. Extreme

David
Yikes. Extreme unicycling!
Love it.
cheers
Bernard
 

Hey, sore-loser, doncha know

Hey, sore-loser, doncha know the UN Motto?
 
'Let's hold Committee Meetings until They're all Dead'.
 
It's certainly working for Syria.

Rats leaving a sinking ship

Rats leaving a sinking ship
Will the stain of complicity be leveled against these servants?  Not on your life.

As I understand it Stephen

As I understand it Stephen H,..............Miguel Ordinez as God fearing member of the Socialists Workers Party has retired early to pursue his unusual hobby of Bear Dodging....a little known  interest that involves fleeing angry bears who have awoken to find your sticky fingers in their honeypot.
Quite exilarating...but with obvious downsides....a real step up from taunting Bulls! 

..... it's OK guys , only the

..... it's OK guys , only the ordinary senors & senoritas will be clobbered by the bank crashes ... the important folk ( the gorgeous elite of bank managers , civil serpents  & politicians ) will be just fine !  ...
 
The pain in Spain falls mainly on the plain .

What do you think about the

What do you think about the prospect of having the ICC accept a case under the definition of crimes against humanity?
 
http://en.wikipedia.org/wiki/Crimes_against_humanity
 
See definitions of the Rome Statute (Article 7) - c, e, h, and k - all look to have some merit to me.
 

I really think NZ should

I really think NZ should revoke the faux independence attributed to the RBNZ and in particular the Governor. 
 
Voters can no longer afford his indefensible tributes to bank welfare.
 
The responsibilty of monetary policy needs to rest with the Minister of Finance, and if he wishes to dance with the devil of larger profit transfers to Australia the voters can throw him out every three years.
 
None of this ten year tenure nonsense, at an ever increasing salary, undertaking the dirty work behind the torn veil of independent central bank competence.

Well, yes to all but the NZ

Well, yes to all but the NZ situation is no different in many respects to central bankers and their masters in many nations the world over.
 
So, the question remains - where does the whole of humanity turn to for justice?  For, sure as eggs, we are not going to be lead out of this catastrophic injustice by government bodies - quite the opposite.  The international court seems to me to be the place for as soon as even what appears to be a credible challenge is announced, there will be change.  
 
Perhaps Bernard should put the question on the potential for such a case to be accepted by the ICC, to say, Chen & Palmer?  
 
“Never believe that a few caring people can't change the world. For, indeed, that's all who ever have.”  - Margaret Mead.

Kate -  the first step would

Kate -  the first step would be to get the actions of the culprits declared prosecutable crimes. It seems potential middle class offenders, especially the banking variety, face no prospect of being arrested. The offending institution declares neither guilt or innocence on their behalf and pays a fine. Hardly justice to those denied it.

Exactly -

Exactly - suggestions/evidence abounds everywhere.
 
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877341,00.html
 
 

This fraud is being conducted

This fraud is being conducted by not just bankers but salaried council staff and elected local body officials much closer to home. Look at Kaipara District Council and their illegal actions over the waste water system at Mangawhai http://www.kaiparaconcerns.co.nz/ .
This fraud is made much worse by the inactions of the Auditor Generanl and her staff at Audit NZ.
This issue could be one of the biggest cases of fraud and illegal actions ever visited upon ordinary citizens in NZ. It probably exceeds $50 million and has been ongoning since late 2006/early 2007.

I think the problem

I think the problem Kate......is that fraud or the adherence to a systemically flawed process with "intent" to defraud or become a party to fraud on this scale is difficult enough to prove on a case by case basis.......even though it may be as clear as the pinocchinose on their face .
 To prove " intent "on Crimes Against Humanity would be a whole other ballgame, the most I expect you could hope, for would be gross negligence causing utter human misery.
Unfortunately I think  the Elite behave much better when given Italian Neck Ties....it will come to that...it probably should come to that.....because even an International Class Action taken by the citizens of the developed world would be doomed to fail unless the Laws that guarantee the Elite the freedom to operate without fear of penalty would need to be revised prior to any meaningful inquiry. 
The funny thing about the Elite is they understand respect through fear.....and accordingly they only learn respect the same way.

United Nations salary and

United Nations salary and wages have been tax free since way back. All countries agreed to this to stop complications with tax residency issues and other. Each would exempt residents on that income. Foreign diplomats over a certain senoir level are treated the same.
The level of their remuneration is  meant to take into account the tax free status. Still as you point out they are all worth lining up for your mob hanging, that you seem to be promoting, with your wording. Why look for reasons, just make judgements.  After the latest budget kids who earn $5 per week are laible to tax and it will cost heir employers  10 times that to deduct the small amount of tax. Next will be a cpaital gains tax that even IRD says will cost more than it will take in. Again we can borrow the money to pay for the costs of doing so. Productivity, what happened to it? No you can tax your way out of all societys issues
 
Not trying to say
 
No

..... so , Comrade Helen ,

..... so , Comrade Helen , who introduced a 39 % income tax on us " rich pricks " earning above $NZ 60 000 ....... isn't now paying a penny of tax on her ....... what is it , $US 500 000 p.a. ?

Because everybody loves to

Because everybody loves to see justice done --- on somebody else.

GBH. Most probably she will

GBH. Most probably she will not be paying tax, but her level of salary is meant to compensate for that. That I have no idea about of course. But attack the real issue, not something thats irrelevant in itself 

A CGT isnt about directly

A CGT isnt about directly generating tax income....by having one ppl dodging the normal tax channels or pa no tax (eg selling shares) get snagged...
regards

Steven   That can be the

Steven
 
That can be the case. But it will cost, when the funds could be beter used elsewhere

Do you have a link to the

Do you have a link to the IRD's comment? I can find nothing and in fact it suggest there is no real numbers on its actual cost.
There will be a NET gain though so its not a case of losing money as far as I am aware. Also it then levels the playing field so ppl dont invest to dodge tax but invest to make the biggest profit.
The very rich it seem also benefit from no CGT....(needs verifying mind)
http://www.interest.co.nz/property/54264/green-party-ups-crusade-capital...
also this,
http://tvnz.co.nz/business-news/capital-gains-tax-elephant-in-room-exper...
suggests no CGT is un-usual.
regards.
 

syria will be a sea of rubble

syria will be a sea of rubble before the un acts.
have the un ever stopped any conflict?the yanks won't go in by themselves it's time for russia and china to go in after all the both supply all the weapons to syria.
fancy that. getting shot by your own weapons.

Syria has a corrupt and

Syria has a corrupt and horribly repressive regime but the guys on the other side are nearly as bad and supported by special forces of the west trying to destabilise the country a la Libya. Lets not forget Syria was an ally of the west against Saddam in the first Gulf War (massacres in Homs and all) or until recently hosted US rendition centres for the outsourcing of torture of suspected terrorists/insurgents. Israel will be salivating at the prospect of getting back the Golan Heights and its water resources. Its all very machiavellian

Lol this is what I said on

Lol this is what I said on Monday about Lagarde's criticism of Greece
"Lagarde is part of the French elite along with their banks that will have their heads handed to them if Greece defaults. I'm sure the French elite are no better at paying their share than their Greek mates."
 
Two faced scum bags running virtually every government in every country. Power either corrupts or they were arrogant and self entitled to begin with.
 
Which leads to all those Chinese princelings going to elite universities. Those institutions foster the sort of arrogance and entitlement we see and a contempt for lesser mortals who could only go to ordinary universities or couldn't afford to go at all. You don't need a formal conspiracy when all the main actors are educated the same way and have a miopic view of the world. Britain, US, China, Europe makes no difference, the elites are working off the same songsheet.
 
Rewatched Inside Job in the weekend. The economic departments at Harvard et al are corrupt to the core and a major reason for where we are today.

 

"A big motivation for such

"A big motivation for such saving is lack of a social security system to cushion Chinese in old age or ill health. Serious illness or accident often spells household bankruptcy. For most rural people, children have to play the role of pension provider."
 
China is a totalitarian neo capitalist system not communist, where the people have agreed to forego political liberty for the prospect of economic growth, just like the German's in the 1930's and perhaps the US in the next 20 years. If anyone says we have to be more like the Chinese be very afraid. An economically dispirited and anxious populace are generally more pliable.

#7 Wasn't Kaiangoroa Forest

#7 Wasn't Kaiangoroa Forest the worlds first carbon capture storage plant? And it has more than just dual fuctionality too.  Now according to Gunther we have to be scared of cheap energy?!

...... which would be nice if

...... which would be nice if we still owned Kaingaroa ...... unfortunately , 60 % of the forest was sold to the Harvard University ( USA ) , for $NZ 300 million ( at around $NZ 3000 / ha. ) , in 2006 .. ...( wasn't Labour the government in NZ then .... hmmmm ? )

...... it's going to be

...... it's going to be Nationalised ? ...... ha ! ......... curious to know how much profit Harvard will harvest out of the tax-payers of NZ .... for such a " premium " and " strategic " asset ...

They probably want out as

They probably want out as they intend along with others to thrash the KIWI/USD pair with their inordinately large resources. - despite their best efforts to destroy them with derivative bets. If this chart is an indicator they may just fleece us as export receipts in NZD will be rising for a local buyer. 

Harvard have done very well

Harvard have done very well out of this investment. It is not at the expense of the NZ taxpayer though, who sold it for circa $2.1 billion to a Fletchers / Brierley / CITEC consortium who couldn't pay the interest and went into receivership. NZ Super have presumably bought their share of the asset at a value that reflects the long-term cashflows.

NZ Super have presumably

NZ Super have presumably bought their share of the asset at a value that reflects the long-term cashflows.
 
Maybe - but due to commercially sensitive information request denials we will never know. 

Which along with Kiwirail,

Which along with Kiwirail, Air NZ, BNZ shows that private ownership of formerly public assets doesn't suddenly increase an organisations profitability or efficiency, just its ownership. As Brierleys has shown several times and private equity firms recently, private ownership combined with massive debt and rose tinted management is not a long term business model.
 
Its important too that NZ not agree to a TPP that allows corporations to sue our government for regulatory or tax changes that can be used as an excuse for poor financial performance

All this talk of devaluing as

All this talk of devaluing as if it solves everything is disturbing.  No one ever devalued their way to a life of wealth and happiness.  If you think of your worth in monetary terms you must be, by definition, devaluing your own worth.

Hey Ralph stop that...!  One

Hey Ralph stop that...!  One of those idiots might just read that and bing the light goes on...! We can't have that just now Ralphie.....mmmmmmnosireeebob.
Always remember...Everything is a good idea as long as you don't think about it.

To suggest Euro labour rates

To suggest Euro labour rates are a problem because the Germans want to keep their advantage is placing the cart before the horse.  The whole thing will rationalise when those Euro members who have been spending beyond their means have to begin to do so.

If we seriously sequestered

If we seriously sequestered our carbon - or even a significant portion of it, our real EROEI would be reduced to the point where the relative 'cost' of energy would put the permanent kibosh on real growth.
 
No doubt there would be repeated efforts to grow virtual wealth - share price gains, upward asset-valuations - but as Soddy said, negative pigs don't cash in near as well as positive ones.

7# carbon capture is a joke

7# carbon capture is a joke IMHO. I suspect the distances and scale just cant and wont add up let alone making the tech even work....time to move on.....ie use alternatives to coal/gas/oil and whats left accept the co2 output and save it elsewhere....eg massive tree planting.
regards

Of course carbon capture is a

Of course carbon capture is a joke, but all cults need a building to celebrate themselves, the pyramids, the Vatican, Angkor Wat spring to mind.

A sort of useful article from

A sort of useful article from Stratfor on Egypt elections and the Arab world in general.
 
"This is not how the West, nor many Egyptians, thought the Arab Spring would turn out in Egypt. Their mistake was overestimating the significance of the democratic secularists, how representative the anti-Mubarak demonstrators were of Egypt as a whole, and the degree to which those demonstrators were committed to Western-style democracy rather than a democracy that represented Islamist values.".....
 
.....If we understand how the Egyptian revolution was misunderstood, we can begin to make sense of the misunderstanding about Syria.....
 
.....One of the problems of Western observers is that they tend to take their bearings from the Eastern European revolutions of 1989. These regimes were genuinely unpopular. That unpopularity originated in the fact that the regimes were imposed from the outside......
 
The military coups that swept the Arab world from the 1950s to the early 1970s were seen as nationalist, secularist and anti-imperialist. Their opponents were labeled as representing Western interests and corrupt and outmoded regimes with close religious ties. They were not liberal regimes, in the sense of being champions of free speech and political parties, but they did claim to represent the interests of their people, and to a great extent, particularly at the beginning, they earned that claim. 

Read more: The Egyptian Election and the Arab Spring | Stratfor

Spengler nailed this, earlier

Spengler nailed this, earlier and with more insight, quite some time ago....

He sure did. I have posted

He sure did. I have posted here before that Egypt imports 30% of its water via food. Resources not politics are the problem.

Leaving the Kiwi zone.  It's

Leaving the Kiwi zone.  It's when the export dominant South Island gives up on the import consuming North Island.
Ever see the play 'Le Sud'

  The lies of the EBA about

 

The lies of the EBA about how safe our banks are.
 
http://www.golemxiv.co.uk/2012/05/the-lies-of-the-eba-about-how-safe-our...

No I cannot back it up

No I cannot back it up directly and I must limit my comments 

I don't have any problems

I don't have any problems with Lagarde paying zero tax on a high salary as compared to her remarks regarding the Greeks not paying their taxes. The Greeks have borrowed big to live large, but somehow think that paying taxes is optional. If they played by the rules - their own rules, obstensably, no less - then they might not need the German's to bail them out yet again. Lagarde doesn't owe money all over town and is legally paying zero taxes - quite the opposite for Greece.
Bunch of idiots, really. In a commonwealth country, if the rich and politicians didn't pay their taxes, the rest would continue paying their taxes and demand these others be held to account. In Greece, it seems, the non-rich/non-politicians see these others dodging their taxes and think "I'll have some of that." Small wonder Lagarde is more concerned for the plight of the desperately poor in Africa.

Think you're being too harsh

Think you're being too harsh on the Greeks. Money was lent recklessly by French and German banks. Now they're crapping themselves about getting it back. Tough, should have been more careful.
 
Secondly most of the money (and the tax avoidance) was by Greece's wealthy, a small percentage of the population. But as in most countries they have got their money out and left the mess to the poor and middle class to pay. Most of them are victims in all this. Imagine if in the future NZ was in the same place because of residential/rural mortgage debt. 70% of us have none at all. Of the 30% with mortgages only a small group will be grossly overindebted yet they could cause a crisis. Should the rest of us have to suffer because of their recklessness/grand designs? Should the banks that lent the money be made whole because they thought the good times (read bonuses) would never end?
 
Thirdly the Greeks have a modern democratic history blighted by a German occupation, military dictatorship and decades of interference in its internal politics by the US and NATO up to and including murder and "terror" attacks to prevent any vaguely socialist party attaining power. Ditto Italy. Its no accident there have been so many elections in these countries.
 
The feckless Greek story is typical propaganda repeated so often it becomes accepted as fact.

Actually Im sure it was very

Actually Im sure it was very carefully lent, to maximise bonuses....
Looks like Spain wont last til end of June.....maybe side bets on who quits the EU first...a race to the exit it seems.....a fight for no1 with italy going for a bronze....
and the leaders are still clueless, eg

"Cameron: we need to make Europe more competitive"
like against who.....is this the best they can come up with? an oxymoron...who against? how?  pay EU workers the same as the third world maybe?
hello Mr cameron.....if this is the best you can come up with you should resign.....like duh...
regards
 
 

#7 The answer is simple (IF

#7 The answer is simple (IF CO2 was really a problem which is isn't) and already been used with fantastic results during the space race to the moon:
 
Lithium Hydroxide scrubbers .
How can Co2 possibly be considered the No 1 villian in fossil fuels when 'we' (public & government) seem quite happy to breath as much benzene as we like?
http://en.wikipedia.org/wiki/Benzene

#10 Another one for Chris J!

#10
Another one for Chris J! lol

#10 is propaganda and rubbish

#10 is propaganda and rubbish combined!
 
BTW The Romans quantitatively eased 2000 years ago! (Read Tacitus).
 
That cartoon is the type of thing that you would envisage Goebbels writing (without the final conclusion that he would have drawn - about who the bankers were).
 

You have to ask why the

You have to ask why the Romans eased, and what the parallels were.
 
They hit Peak Wood. The energy required to cart the cooking/heating firewood in from the periphery, obviously got greater and greater. Agriculture required to feed beasts of burden, carts to be built, roads to be built/maintained.
 
At the point where it took more energy to get the wood to Rome, that it returned in burning, they were in negative EROEI. No amount of QE could alter the physical reverse.
 
We're blindly going down the same track - fracking, deep-sea, even lignite......
 
Lack of ability to learn?

They also hit peak slaves and

They also hit peak slaves and peak pillaging....
An interesting economic model to show this is a game,  minecraft as it shows you clearly the wood issues....as you clear that wood and minerals around you you have to go further and further afield...and there is only you....so you automate and build railways...but that costs and that starts to get to limitations.....
Then of course you get to use coal.....then oil and then uranium...(yes you can build your own nuclear reactor) yet you start from a caveman....but the distances and densities still bite...
regards

I've now worked out how

I've now worked out how everyone has such great knowledge!
 
Of course Roger Sutton is using his SimCity experience to rebuild Christchurch!!  (He's got the bulldozers in full swing hoping redevelopment follows, if not he'll start splashing out on Civic Buildings!)

Wow how stupid you come

Wow how stupid you come across as.....and that is why I suspect we see the state of the world today as it is. many ppl dream of how things should be it seems and try to make it so despite reality....could be why we are so screwed....
Dont you use spreadsheet(s)? to run your business? or do you do a Crafer?  Otherwise that is maths, a model of your business which I assume you then project forward....its what I do.
Top end economists for instance also use maths, they call it a model it has laws or constraints built in to help them understand what is going on in the real world. A game is maths underneath....you learn what you can and cannot do....
 
regards
 

PDK your imagination

PDK your imagination bewilders!
 
Go study your classics!  I am talking about writings from Tacitus (who was dead 150 years before the Roman Empire started running into problems).  Book 6.17 was early first century, the financial crisis was nothing to do with energy!  It was a shortage of currency (cf 2008) so the emperor printed 100million sesterces and offered interest free loans for a period of three years (if secured against land).
 
The financial crisis was about 30-40AD, the Roman Empire started having problems about 235 (including Plague issues) and the decline wasn't until about 395AD.
 
Peak wood?  I think not!  The Romans could overcome those kinds of issues at that time (they still controlled most of Europe including Britain at the time).

Silly comment, ChrisJ.   A

Silly comment, ChrisJ.
 
A shortage of currency?
 
Currency buys stuff.
 
You'd have fitted right in - they didn't identify the problem either. How much energy did it take to haul wood from Britain?  (your example)?
 
 
 

PDK, read the

PDK, read the translation:

Hence followed a scarcity of money, a great shock being given to all credit, the current coin too, in consequence of the conviction of so many persons and the sale of their property, being locked up in the imperial treasury or the public exchequer. To meet this, the Senate had directed that every creditor should have two-thirds his capital secured on estates in Italy. Creditors however were suing for payment in full, and it was not respectable for persons when sued to break faith. So, at first, there were clamorous meetings and importunate entreaties; then noisy applications to the praetor's court. And the very device intended as a remedy, the sale and purchase of estates, proved the contrary, as the usurers had hoarded up all their money for buying land. The facilities for selling were followed by a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined. The destruction of private wealth precipitated the fall of rank and reputation, till at last the emperor interposed his aid by distributing throughout the banks a hundred million sesterces, and allowing freedom to borrow without interest for three years, provided the borrower gave security to the State in land to double the amount. Credit was thus restored, and gradually private lenders were found. The purchase too of estates was not carried out according to the letter of the Senate's decree, rigour at the outset, as usual with such matters, becoming negligence in the end.
 

 

http://www.sacred-texts.com/cla/tac/a06010.htm
 
Why on earth would they haul timber from Britain?  They controlled all of Southern and most of Central Europe!   In fact they got most of their wood from the Mediterranean.
 
The Romans recognised the importance of wood (as written in Pliny's Natural History).  It was not a lack of wood or charcoal that ended the Roman Empire.

They were where we are

They were where we are now.
 
They'd run out of the energy-backed supply of wealth-underwrite. They'd (if I read that right) relied on inflated 'values' of existing assets. We've just done that globally.
 
The system requires real inputs to do the underwrite, and there is no underwrite without the inputs. Those inflated values expect to be turned into 'money' en route to being exchanged for 'stuff''. Goods and services.
 
Merely speculation which collapses when the Emperor is seen to have no clothes. A game of misical chairs.
 
Then as now.

Gosh, PDK you are obsessed

Gosh, PDK you are obsessed with energy - note that energy was not mentioned at all in that translation!
 
Remember their horse power was powered by grass, which grew free and natural without any energy (no fertiliser!).

That's the whole point,

That's the whole point, CJ.
 
without fertiliser, the retiurn per acre had to diminish. There is no free energy lunch.

Standford have been

Standford have been developing the ORBIS system, described as the google maps of anceint Rome, where you can note only see the route planning kind of things but also the prices for transporting commodities and people around the Empire. 
http://orbis.stanford.edu
 

The fuel of the Roman empire

The fuel of the Roman empire wasn't firewood. It was charcoal. This was produced in some locations for hundreds of years, the skills passed from generation to generation. The forests were carefully managed, with the origins of the art of coppicing lost in pre-history. The compressed charcoal fuel that fired the furnaces that produced the iron, steel and cement that built the empire was a clean burning, sustainable high eroei fuel. It was the collapse of the empire that caused the break-down of Roman industrial production including char-fuel. Talking about peak wood as the cause of the breakdown of the empire is incorrect. It was one of the many effects, not the single cause.

Charcoal was used as a fuel

Charcoal was used as a fuel right up to recent times in Italy. The revolutionary movement in C19th Italy called themselves the Carbonari, after the charcoal makers who lived in the hills. The name was synonymous with anonymity, as the Carbonari retreated in guerrilla fashion to the safety of the hills/mountains just like their namesakes. 

The source of charcoal is

The source of charcoal is wood. While reasonable as a stand-alone EROEI, in situ, it still needed transported, and doesn;t count the input in that equation. 
 
Coppicing is indeed sustainable, if carefully done. It wasn't. Why did they live in the hills? Folk like Hughey had cleared the plains for agriculture......    :)
 
Every empire has reached out to suck resources from the periphery - it's the only way to local wealth. Can't be done globally, when there' no virgin sources to hoover.

I'm not sure you understand

I'm not sure you understand coppicing??   Coppicing is cutting down a tree and letting it regrow from the stump (easy to do with sycamores, poplars and willows).

.... traditionally coppices

.... traditionally coppices included a few slower growing hardwoods too , such as Oak ( Quercus sp. ) . Some were harvested every 8 to 12 years for well over a century .

Rome didn't just collapse

Rome didn't just collapse because it ran out of wood, there were a lot of factors. (I taught classics and history for 20 years, so have an interest in the subject). One interesting theory is that germanic tribes suffering from the cooling that set in after the Roman warm period said "lets head for the warmer Meditterranean beaches" Rome just happened to be in the way.
The Greeks on the other hand abandoned  Mycenae as a  change in the climate meant drought for the area. 
Warm periods have resulted in flourishing civilisations. Have you visited European cathedrals from the Medieval warm period? Certainly they are religious artifacts today but a testament to the abundant energy available in the form of food supplies for the peasants who toiled to build them. 
Draft animals hauled the wood to market. They were fueled by grass, not hydrocarbons.

Interesting comment OMG - a

Interesting comment OMG - a studious missing of the points one doesn't want to consider.
 
Cumulative energy includes the breaking of chenical bonds in grass. Did they put in what they took out? The need to cart fertiliser and spread it - all energy-consuming - has to be sublracted from the energy returned by photosynthesis thence turned onto cart-pulling. Ships take trees directly in competition with wood-for-fuel.
 
Gotta see the big picture.

Cumulative energy includes

Cumulative energy includes the breaking of chenical bonds in grass. Did they put in what they took out?
 
Oh you really are unbelievably stupid! Why don't you just shut up for once.

Coming from a completely dumb

Coming from a completely dumb person such as yourself who clearly demonstrates zero science and maths ability that is funny.
regards

careful Steven - Bernard

careful Steven - Bernard doesn't like it.    :)
 
One does wonder what the fellow eats, though. Calories, perchance? Wonder if he knows a farmer - should ask how long you can take meat of grain off a paddock without putting nitrient back in, and giving it sunlight time.
 
Funny old world.

Short answer, to a degree

Short answer, to a degree yes. The Romans were great collectors of everything! I've just been searching for an online copy of a great doc on the Colisseum, but can't find it. Basically it said that the arena swallowed up resources to keep the blood thirsty masses entertained at an unsustainable rate. Have you ever been to the Pantheon? Truly amazing. It so overwhelmed the invaders that fortunately they didn't destroy it!

mist, I'm sure you will get

mist, I'm sure you will get there some day. I remember reading your resume and you have had a very interesting and varied career.

87 is pretty early...many

87 is pretty early...many dollars per MB....now its a dollar per gb...
I find this site a good starting point, Ive watched more than a few into the early hours....
http://topdocumentaryfilms.com/
regards

Not mention the magnificent

Not mention the magnificent Abbeys of Northern England, now a cold hard land, but filled with vineyards in the Middle Ages.

That's right, grapes even

That's right, grapes even growing under Hadrian's wall.
There's new information coming to light all the time. Historical records have been ignored. Here's a recent one which has not been given much publicity. Most interesting.
http://wattsupwiththat.com/2012/05/02/cache-of-historical-arctic-sea-ice-maps-discovered/#comments

http://en.wikipedia.org/wiki/

http://en.wikipedia.org/wiki/Energy_returned_on_energy_invested
 
Thomas Homer-Dixon [5] demonstrates that a falling EROEI in the Later Roman Empire was one of the reasons for the collapse of the Western Empire in the fifth century CE. In "The Upside of Down" he suggests that EROEI analysis provides a basis for the analysis of the rise and fall of civilisations. Looking at the maximum extent of the Roman Empire, (60 million) and its technological base the agrarian base of Rome was about 1:12 per hectare for wheat and 1:27 for alfalfa (giving a 1:2.7 production for oxen). One can then use this to calculate the population of the Roman Empire required at its height, on the basis of about 2,500-3,000 calories per day per person. It comes out roughly equal to the area of food production at its height. But ecological damage (deforestation, soil fertility loss particularly in southern Spain, southern Italy, Sicily and especially north Africa) saw a collapse in the system beginning in the 2nd century, as EROEI began to fall. It bottomed in 1084 when Rome's population, which had peaked under Trajan at 1.5 million, was only 15,000.

You might find this

You might find this interesting. ;-)
http://documentarylist.net/index.php/search.html

Peak greed .. I wonder now

Peak greed .. I wonder now whether we are there yet?

#9 Follow up to Texas

#9 Follow up to Texas Mortgage kegislation LVR requirments. The article below has just been sent out on my International General Email List........\
 
 
PHOENIX, ARIZONA:
BACK ON THE HOUSING BUBBLE ROLLERCOASTER

 
Hugh Pavletich FDIA
Cantabrians Unite
Performance Urban Planning
Christchurch
New Zealand

 
May 30, 2012

 
 
Phoenix, Arizona (like Las Vegas, Nevada) is a strangled housing market, because much of the land is under Federal Government control and is not responsive enough with land supply. So, instead of being able to quickly provide new housing – a bubble is triggered - unnecessarily.

 
This could not happen in Texas, for example, which has open land and sound infrastructure financing  policies, allowing adequately responsive land and housing supply to meet demand.

 
Azcentral.com explains within “Big profits for home-flippers signal Phoenix-area rebound: how this new housing bubble has just erupted again in Phoenix, Arizona.

 
Within a recent New York Times article by Floyd Morris “Texas Lending Law Shielded Many Homeowners From Housing Bust - NYTimes.com”, the significance of that States Mortgage Consumer Protection legislation is discussed. In theory there are limits to the Loan to Value Ratios.

 
There is debate about the significance of this legislation or whether the memory of the S&L crisis is seared in to Texas political and commercial culture (as the Weimar Republic inflation is seared in to the memory of Germans) is a more significant influence on responsible mortgage lending. Not surprisingly, it is the Banking sector (not known for its sense of social responsibility) pressing for the relaxation of the Texas Mortgage Consumer protection legislation though!

 
Be that as it may - a multimedia hyperlink “Hints of a Bottom in Home Prices - Graphic - NYTimes.com” is provided, illustrating how much prices fell within various housing markets throughout the United States, after their artificial land scarcity “triggered” housing bubbles collapsed from their peaks.

 
Phoenix at the peak of the bubble hit a median house price of $287,000 collapsing to $119,000 – a 55% fall.

 
In contrast – the normal open and affordable market of Dallas Fort Worth median house prices remained unchanged at $149,000. Rather amusingly, as the bubbles were collapsing elsewhere, the soundly governed housing market of Houston median house prices moved from $149,000 to $156,000 – a 5% increase over a 5 year period through mid 2006 through late 2011.

 
During mid 2010 within the article “Americans Slow Learners About Housing Bubbles | Scoop News”, the writer drew to readers attention an important speech at the time, to the US Annual Real Estate Editors Conference in Austin, Texas, by Mike Inselmann, co founder and President of the US housing industry research firm Metrostudy .

Mr Inselmann made it clear within his speech that the “witch brew” of the housing bubbles was a local growing economy restricted by regulation and lack of land supply to meet demand – not the sub prime (lax) lending.

“ The housing bubble ‘didn’t start with sub prime – they were the guys who added gasoline to the fire. They (others – being regulators)) created a mismatch which started the inflation in housing, that was turbocharged by sub prime financing’ he said”.

“ ‘The housing market was hitting a wall in affordability, and sub prime lending offered the means to continue the price escalation’ he noted”.

“ ‘When the next housing cycle hits, the danger is that we are going to go through exactly the same phenomenon we went through this time’ Inselmann said”.

Mr Inselmann’s words unfortunately have proven prophetic – with respect to the United States housing bubble markets. Nothing has been learnt.

Local artificial land scarcity is the housing bubble “trigger” – finance in all its forms (whether equity, bubble equity, mortgage debt) is simply the “fuel”.

Rather remarkably – it seems the artificially land strangled housing bubble markets of the United States – such as Phoenix, Arizona – are blindingly repeating the mistakes of history. It’s not that far to travel from Arizona to Texas to learn how normal affordable housing markets are governed responsibly.

Indeed –  the normal housing markets of Texas appear to be better understood in New Zealand and Australia than Arizona, due to the annual release (8th Edition this January) of the “Demographia International Housing Affordability Survey” !

ENDS
 

FACEBOOK They're desperately

FACEBOOK They're desperately holding the price up. Institutionalised Jiggery Pokery
 
It's 9:00 pm AEST, 30 May, and NASDAQ Exchange has imposed a Short Sell restriction

There has been far more than

There has been far more than that going on for the last 40 minutes in at least the US and Europe. Resources in particular were hard hit, then on the hour a massive spike up.

and then

SPAIN TO EXIT EURO FIRST

SPAIN TO EXIT EURO FIRST ?
 
Interesting reading on Mish (Mike Shedlock) this morning -
 
http://globaleconomicanalysis.blogspot.co.nz/2012/05/eu-throws-spain-two-deathlines-spanish.html
 
http://globaleconomicanalysis.blogspot.co.nz/2012/05/spexit-before-grexit-six-reasons-spain.html
 
6 reasons why Spain will likely leave first......
 
One: Spain is too big to rescue.

Two: Spain has tired of austerity already. Remember, the protests against cuts began in Madrid a year ago with the “indignados” movement, which started sit-ins across major cities in 2011. The protests spread from there to Greece, and other euro-zone countries. The austerity had hardly even begun, yet already it has provoked strong opposition.

Three: Spain has a real economy. The Greeks understandably feel nervous about life outside the euro zone. They don’t really make anything. Spain is a successful economy with a perfectly respectable industrial base – its export to GDP ratio is 26%, similar to the U.K., France or Italy. Only last week the Japanese car-maker Nissan announced a major new investment there.

Four: Spain is politically secure. For many countries, euro membership is more about politics than economics. The Greeks stay in because it locks them into Europe (rather than being part of the Turkish sphere of influence). Latvia wanted in because it made it part of the EU rather than being dominated by Russia. For the Irish, it is about separating themselves from Britain. The Germans stick with the euro because the EU still represents a break with its troubled past.

Five: Spain has bigger horizons. The Spanish economy looks partly to Europe. But it looks just as much to the booming Spanish-speaking economies of Latin America (and indeed the huge Hispanic market in the U.S.). Rather like the U.K., Spanish business has always looked to the global rather than the European market. Why tie yourself to a failing project when there are much bigger opportunities out there?

Six: The debate has already started. There is already a serious discussion underway in Spain about the future of the currency. Plenty of mainstream economists and pundits are arguing that the real problem is the euro, and Spain will only recover once it gets the peseta back. The taboo has been broken. That isn’t true in Greece, where even the far-left Syriza party still clings to the idea that it should stay in the euro.Debate in Spain

Proving point number six above, El Economista picked up on the story in Comes Spexit: Spain's Euro exit before Greece?

If prime minister Rajoy refuses a bailout by the Troika, what other options does Spain have? Is another puppet government like we saw in Greece and Italy coming up?

.......................................
 
Overhanging all this is the French housing bubble collapsing too, as Ambrose Evans Pritchard of the UK Telegraph outlined last weekend -
 
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9293270/Europes-Maquina-Infernal-has-crippled-Spain.html
 
Another utopian political experiement out of Europe  bites the dust ?
 
Hugh Pavletich
www.cantabriansunite.co.nz
www.PerformanceUrbanPlanning.org
 

CHRISTCHURCH COUNCIL MARSHALL

CHRISTCHURCH COUNCIL MARSHALL REPORT GETS BLASTED BY CANTABRIANS UNITE
 
http://www.stuff.co.nz/the-press/news/7018936/Report-on-councillors-for-10-000
 
...........
 
Peter Lynch, of council protest group Cantabrians Unite, said Marshall's report was evidence of an effort "to victimise and marginalise certain councillors who acted in the community's best interests".
 
"The government has continued to provide a political protection service for the failed Parker and [chief executive Tony] Marryatt regime," he said.
 
.........
 
Further discussion and background information available at www.cantabriansunite.co.nz - and in particular its Facebook page - http://www.facebook.com/CantabriansUnite .
 
Regrettably - there has been to date extremely poor political decisionmaking with respect to Christchurch by the Key led Government - for the extensive reasons outlined on Cantabrians Unite and its associated Facebook page.
 
Hugh Pavletich
www.cantabriansunite.co.nz
www.PerformanceUrbanPlanning.org
 

FYI to all. I enjoyed the

FYI to all.
I enjoyed the Peak Wood/Roman Charcoal thread.
But I intervened when I saw the n..zi word. That's my trigger word.
And the tone was turning intemperate. Let's be nice here people.
Much more fun that way
cheers
Bernard

..... no " Peak Imagination "

..... no " Peak Imagination " around here , Bernard .... the troops went off on an invigorating  tangent ...... most enlightening !

Fair enough, OMG

Fair enough,
OMG

  Nobel Prize winning

 
Nobel Prize winning economist Paul Krugman says Greece will have to leave the euro.
He told BBC HARDtalk's Sarah Montague there was no alternative but whoever took the decision Greece should go would simultaneously be ending their own political career.
You can watch the full interview on BBC World News on Thursday 30 May at 20.30 and on Friday 31st May at 03:30, 08:30, 15:30 GMT and on the BBC News Channel on Friday 1st June at 00:30 BST and 04:30 BST.
Watch recent episodes online (UK only) or subscribe to our podcast. Find out who is coming up on the programme by following us on Twitter .
Excerpt here
http://news.bbc.co.uk/2/hi/programmes/hardtalk/9725121.stm